RWJBH, Saint Peter’s will not appeal FTC’s blocking of merger

RWJBarnabas Health and Saint Peter’s HealthCare System announced Tuesday afternoon that they will not appeal a ruling by the Federal Trade Commission that blocked their proposed merger.

The proposed academic medical center — a 1,145-bed research center and teaching hospital that would increase services and the quality of those services — was intended to serve as an alternative to such facilities found in New York City and Philadelphia, thus giving patients in New Jersey an opportunity to get top-shelf treatment without having to cross over state lines.

But, on June 2, the FTC blocked RWJBH from acquiring Saint Peter’s, saying such a deal would limit medical care options in New Brunswick and would “harm competition for inpatient general acute care services, which are a broad range of essential medical and surgical diagnostic and treatment services that require an overnight hospital stay.”

The announcement is the latest step in a process at Saint Peter’s during the past several years that included a Request for Proposal in October 2018 seeking a strategic partner best suited to help the organization maintain its rich Catholic mission and identity in an increasingly changing and competitive healthcare market.

“This difficult decision was not reached lightly,” Barry Ostrowsky, CEO of RWJBarnabas Health said. “We are disappointed in the termination of the proposed transaction, which we believe would have transformed quality, increased access and decreased the overall cost of care for the people of this state through the creation of a premier academic medical center. Despite the loss of this opportunity, RWJBarnabas Health remains resolute in its commitment to serve the people of New Jersey — especially those who reside in our most vulnerable, chronically underserved communities — and shall continue to do so.”

“After careful consideration by leadership, the Saint Peter’s board of governors and the Most Rev. James Checchio, bishop of the Diocese of Metuchen and sole corporate member of Saint Peter’s, we have decided to terminate the Definitive Agreement to fully integrate with RWJBarnabas Health. We are very disappointed with this outcome. However, we are grateful for the strong partnership we’ve had with the RWJBarnabas leadership,” said Leslie Hirsch, CEO and president of Saint Peter’s.

Hirsch added that: “We were truly excited about the potential of this opportunity with RWJBarnabas to create a premier academic medical center of national distinction that would have improved quality and increased access especially to the most vulnerable in the communities we serve. We are now assessing the best way to move forward as we consider potential options to ensure Saint Peter’s longstanding Catholic health care mission.”

Hirsch and Ostrowsky were crushed by the FTC’s ruling earlier this month, saying the federal agency did not fully understand the on-the-ground benefits of a plan that seemingly had buy-in by grassroots community groups, employer groups, unions, managed care organizations and elected officials at all levels within the state of New Jersey.

The plan, they said, always had been about patients, not profit.

“We want to do this for the state of New Jersey,” Ostrowsky said previously. “We’re not-for-profit. It’s not like we have shareholders around the country who are going to make a lot of money. Our shareholders are the people in the community.”